Canada applies the same regulations to cryptocurrency exchanges as it does to money service businesses. This includes requiring the same due diligence, reporting, verification, and record keeping. Although Canada is one of the leaders of regulation and taxation on the matter the Canadian tax treatment remains uncertain. Tax rules apply to digital currency transactions, including those made with cryptocurrencies. Using digital currency does not exempt consumers from Canadian tax obligations. This means digital currencies are subject to the Income Tax Act. When you file your taxes you must report any gains or losses from selling or buying digital currencies.